Eli Lilly and Co. and Acrux Ltd. said Tuesday that the U.S. Food and Drug Administration has approved topical solution Axiron for replacement therapy in men for certain conditions associated with a deficiency or absence of testosterone.

The companies reported the information to the Australian stock exchange.

Melbourne-based Acrux, is the developer of the underarm testosterone solution. Indianapolis-based Lilly bought the rightsto the drug in March.

Acrux stock rose to a record in Australian trading, surging as much as 18 percent. The shares were first listed in September 2004.

Acrux will receive a payment of $87 million from Lilly as part of the sales agreement. The Australian company will get royalties and further payments of as much as $195 million. Acrux previously said it plans to pay its first dividend to shareholders in early 2011.

The companies believe the solution has the potential to realize sales of more than $1 billion a year annually in the United States.

More than a third of American men older than 45 years have low testosterone, doctors found in a 2006 study. The condition can sap sex drive and cause impotence, osteoporosis and memory loss, according to the Mayo Clinic in Rochester, Minn.

Results of a clinical trial released in September showed Axiron normalized testosterone levels in 84 percent of men after four months.